Open source could damage the market, says analyst

The open source movement could have a damaging impact on software innovation, according to a prominent market analyst.

Bob Hayward, senior vice president and chief research officer, Gartner Research Asia-Pacific, told ZDNet Asia that software developers could be discouraged from creating new software because of the multitude of open source software available for free. This is further driven by major vendors that are making their software available as open source.

Hayward noted that many of the big software vendors are now evaluating all the software products they produce and identifying those that are strategic to the company, and those that are becoming commoditised.

After they have singled out a software offering which is not core or strategic to their business, or perhaps which is not making money in the market, they then make it open source, he said.

"It has a somewhat paradoxical impact on the market. On one extent, it could be seen as a threat to innovation," Hayward noted. He explained that, in order to ensure a product is unique and marketable, a developer would have to check that it is not similar to open source software that is already available in the market.

"[The developer] has got to be careful not to be in the way of Microsoft, IBM, Oracle or SAP. If you're on their road, you could be road-kill," he said. "He has all these free, open source software that he has got to try to navigate through."

But Hayward stressed that this is only "a slightly dampening effect" on innovation. On the other hand, people can take what is available as open source from the market, improve it, add a module, feature or a function, and sell that as their own. "That could be seen as a good thing in terms of innovation," he said.

This is happening already in the middleware market. For instance, the use of the JBoss open source engine as a standard on application servers is now widespread, even among competing vendors. But vendors differentiate their product offerings from others by adding their own modules on top of the middleware, "and that could be seen [as] an improvement or an innovation", said Hayward.

He is however, sceptical about the spate of big software vendors giving away the source codes of their products. "They are very rational and pragmatic about it. It's good PR and they seem to be good corporate citizens giving these contributions to the world," he said.

"Most of the time though, what they're doing is offloading a burden, and basically asking the open source communities to take on that project," he added.

But he noted that the open source movement is forcing software vendors to rethink the way they sell their products.

In fact, Hayward foresees a time when customers may not have to pay for software at all. "As a general long-term trend, [open source] is definitely accelerating the move away from software as a revenue stream, and toward services as a revenue stream. Maybe it will come to a day when all software is free, and you'll just pay for support and enhancements.

"Ten to 15 years ago, 80 to 90 per cent of big software companies' revenues came from new licence sales, and today, this has been reduced to less than 50 per cent," he noted.

"I cannot see anything happening that would suddenly make people enthusiastic about software licensing again. The trend is moving toward software becoming either free, or paid for as you use it."

Jeanne Lim writes for ZDNet Asia